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Question
What happens to a product in the decline stage of its life cycle?
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Solution
Sales volume and market share fall dramatically during the decline stage of the product life cycle as a result of technological advancements, changed consumer tastes, and fierce competition. As demand declines, production costs per unit can rise as a company loses economies of scale. Harvesting techniques, limiting marketing expenses, and disposing of remaining goods through promotional clearances are commonly used by businesses to manage this phase. Finally, corporations must decide whether to completely divest the old product, continue to sell it to a loyal niche market, or discontinue it entirely in order to maintain corporate profitability.
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